Category Archives: Best Rates

Is QE on the cards from the Reserve Bank of Australia? (Daniel Johnson)

Pound to Australian Dollar Forecast

The Australian economy has suffered of late with a drop in house prices, increased unemployment and a cut in interest rates to a record low of 1%. Australia is heavily reliant on China purchasing its goods and due to this the US/China trade war is having an impact on the Australian Dollar.

China is in the midst of its slowest economic expansion in thirty years and the Chinese Yuan continues to drop in value posting a fresh 11 year low on Monday. Dr Adam Triggs of the Australian National University’s Asian Bureau of Economic Research points to the Trade War as a huge contributor to the Australian economy’s recent stalling “We trade a lot more than most countries and we rely on foreign money for investment, so when you start to get international turbulence we feel that a lot more than others.”

The  concerns around the Chinese economy and its drop in demand for Australian goods and services has meant that the Pound has managed to regain a footing above 1.80 on interbank despite the Brexit chaos Boris Johnson has been inflicting since taking over as Prime Minister.

As Australians interest rates follow the global trend of cuts there has been much speculation over the Reserve Bank of Australia’s, (RBA) next step in efforts to stimulate economy. For some time Westpac has led calls for the Reserve Bank to consider a further cut to 0.5% while Deutsche Bank says it expects the cash rate to drop to just 0.25% by as early as the end of this year. However, Philip Lowe the governor of the RBA has ignited a debate over whether Quantitative Easing (QE) would be the next step for the RBA. QE is essentially pumping money into an economy in order to stimulate growth. It is a controversial monetary policy as historically results have been mixed, it is far from a proven method and can also put the country in question in huge levels of debt. In the face of an economic crisis when he commented “we are prepared to do unconventional things if the economy warranted it” when questioned in Parliament.

During unpredictable times you may wish to be in contact with a currency specialist who can provide the latest currency updates. Foreign Currency Direct PLC has specialised in foreign exchange for over 19yrs and we are authorised as an e-money institution by the FCA. If you already use a provider, I can perform a comparison within minutes, to give you an indication of the potential saving you could make by using Foreign Currency Direct. If you would like my assistance I can be contacted at dcj@currencies.co.uk.

 

Could we see Monetary Stimulus from the RBA? (Daniel Johnson)

Pound to Australian Dollar Forecast

This year the Reserve Bank of Australia (RBA) has continued to cut interest rates leaving the base rate at a record low of 1%. The change in monetary policy has so far failed to stimulate growth in the Australian economy which has resulted in the RBA board looking at  alternative methods of stimulus to try and aid the struggling economy.

There is the potential that quantitative easing (QE). QE is essentially pumping money into an economy in order to stimulate growth, printing money causing huge levels of debt.  The minutes of the RBA’s July meeting revealed that these unconventional monetary policy measures were discussed.

Both the Pound and the Australian Dollar are under pressure at the moment, although for different reasons as the Australian Dollars are mostly due to economic uncertainty as opposed to the UK’s ongoing political issues.

Over the past year the GBP/AUD rate is almost flat although in recent months the Aussie Dollar has mostly benefited from Sterling weakness which has kept GBPAUD below 1.80 for almost 2-months now.

The time scale for a deal on Brexit does not make good reading. Parliament is not due to reconvene from recess until early September which will leave just under eight weeks for Boris Johnson to get a deal in place. This is something Theresa May couldn’t do in over two and a half years.

Boris has threatened to leave the EU with no deal in place and has said he is not willing to negotiate with Brussels unless they’re willing to drop the Irish back stop. This is something Brussels have stated on numerous occasions they are not willing to do. The situation has not been taken well by investors and sterling has fallen in value as a result.

There is also the possibility of a general election and it will be interesting to see how the market will react. If we look at the 2010 general election for example, we saw sterling lose value due to the political uncertainty, but if Corbyn were to call for an election the probability of a no deal decreases which could cause a rally for the Pound.

The higher probability of a no deal the weaker you  could expect the pound to become.

Despite the problems surrounding the Australian economy unfortunately it seems that the problems surrounding Brexit outweigh those down under. Until there is some sort of clarity surrounding the Brexit debacle, there could be little reason to justify significant gains for the pound.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 19yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

Pound to Austrlian dollar predictions: Major volatility expected for pound to Australian dollar exchange rates

Of late mixed outlooks for the Australian dollar has caused the pound to remain range bound against sterling, with GBPAUD fluctuating close to 1.80. The Reserve Bank of Australia recently cut interest rates and forecasters second guessed that another cut is on the horizon as the RBA would need to follow the trend of its nearest neighbour as the Reserve Bank of New Zealand cut rates by 0.5% as their last meeting. In addition the RBA has even hinted at more unconventional methods such as quantitative easing and history would tell us that this could have a detrimental impact on the value of the Australian dollar.

However in recent RBA minutes, the RBA have stated that house prices in Sydney and Melbourne have actually been on the rise in recent months which is positive news for Australia as the housing market is a key cog to Australian economy. Therefore further cuts in interest rates should help the housing market however the RBA will have to think again if house prices continue to rise.

In less than two weeks MPs in the UK will return to the House of Commons and all eyes will turn to the leader of the opposition. Jeremy Corbyn has stated that he will file a motion of confidence against Boris Johnson and it will be interesting to see if any Tory rebels will back Corbyn in a bid to stop a no deal Brexit. Forecasters are suggesting that a no deal Brexit will cause the pound to crash, therefore if Boris is ousted this could help the pound, however if Boris takes the UK out of the EU without a deal this should help clients that are selling Australian dollars to buy pounds.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

US/China Trade War hurting AUD (Daniel Johnson)

Australian Dollar Forecast

AUD  has proved fragile of late due to several contributing factors. There are domestic issues, such as the high value of living in high wage growth areas. This is causing Australian residents to cut back on retail spending. One of the key issues at present is the knock on effect from the US/China trade war.

Australia has a heavy reliance on China purchasing its’s goods and any effect on Chinese growth can have ramifications on the Australian economy. As the trade war escalates so does the potential for the Australian dollar to weaken. President Trump has recently implemented a further 10% tariff on $300bln worth of Chinese products. The Chinese have retaliated by urging  Chinese businesses  to cease purchasing US agricultural products.

Goldman Sachs believe the trade war could continue for some time which does not bode well for the global economy let alone for Australia who has close economic ties with China.

There is the possibility of further interest rate cuts from the Reserve Bank of Australia (RBA) in 2019 according to the bank Governor, Philip Lowe. This could cause movement for the Australian dollar.

Despite the problems surrounding the Australian economy unfortunately it seems that the problems surrounding Brexit outweigh those down under. Until there is some sort of clarity surrounding the Brexit debacle, I can find  little reason to justify significant gains for the pound.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 19yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

Pound to Australian Dollar continues to trade just below 1.80, which factors could see the pair breach this level?

Earlier this morning GBP/AUD tested the 1.80 resistance level, with the pair hitting 1.7998 before easing off and at the time of writing the inter-bank level is 1.7940. The Pound to Australian Dollar rate has remained below the 1.80 handle ever since dropping below it at the beginning of July and based on the number of times we’ve seen the pair test 1.80 it could take some significant to see the pair return to trade levels in the 1.80’s.

AUD was dragged downward by the New Zealand Dollar earlier this week when the Reserve Bank of New Zealand surprisingly cut interest rates by a greater margin than market commentators had expected, resulting in a drop in the New Zealand Dollars value and this negatively impacted AUD also.

Later this week there will be a speech from Reserve Bank of Australia governor Lowe, and I think the markets will follow this closely in case he decides to follow the footsteps of the RBNZ and signal further cuts in future from Australia’s central bank. This could potentially result in a weakening of the Aussie Dollar which could then help the GBP/AUD rate move above 1.80 so those following he pair should be aware of the speech this Friday.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Pound to Australian Dollar Forecast (Daniel Johnson)

Inflation & US/China trade war a concern for Australian Dollar Investors

The Pound has lost ground against the Australian Dollar of late which can be largely attributed to the lack of clarity surrounding Brexit.  Australia has had it’s own trouble however.  Inflation continues to be a problem down under and it is still some way behind the Reserve Bank of Australia’s  (RBA) 2-3% target. The RBA cut rates earlier in the year to 1% in an attempt to combat inflation and there is the possibility of further rate cuts during 2019. The next interest rate decision is due during the early hours of tomorrow and although rates are expected to remain unchanged the statement following the decision from the RBA could influence markets if it is again reiterated there is the possibility of further cuts later down the road.

The heavy reliance on China purchasing Australia’s exports is also causing problems for the Australian Dollar. As the US impose increased tariffs on China, China’s growth slows which in turn has a knock on effect to the Australian economy. Investors are choosing to move away from riskier commodity based currencies in favour of save haven currencies such as the Swiss Franc or US Dollar.

Increasing probability of a Brexit No Deal

Despite the problems in Australia, Sterling still could face further losses. Boris continues to threaten no deal and stated last week he would be ‘turbocharging’ preparations to leave the EU without a deal. Boris is using the threat of a no deal as ammunition to gain a more favourable deal on Brexit. Basically speaking however, the higher the probability of a no deal the weaker you would expect the Pound to become. Brussels stance remains unchanged again reiterating there will be no concessions to the current deal on the table. It is not in Brussels interest to let the UK leave with a decent deal, they do not want other members of the bloc to consider following suit.

The timeline is also a concern. The parliamentary recess concludes 3rd September leaving less than 8 weeks to get a deal in place, keep in mind Theresa May had two and a half years. According to Bet Fair there is a 57% chance of a general election, if you look at when previous elections have taken place the currency in question tends to considerably weaken.  The British 2010 general election serves as testament to this.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 18yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are authorised with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving.  I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading

GBP/AUD rate remain under pressure as Bank of England cuts growth forecast

The Pound to Australian Dollar exchange rate remains close to the lowest levels seen in over 6-months as pressure continues to mount on the Pound across the board of major currency pairs. Since becoming Prime Minister Boris Johnson has ramped up the no-deal Brexit rhetoric and this has rattled the markets which has seen the Pound lose considerable value over the past month or so as his appointment as Prime Minister became a forgone conclusion.

Yesterday the Bank of England opted to hold interest rates where they currently are, but the highlight of the day was BoE governor Mark Carney’s warnings regarding the economic outlook for the UK economy now that a no-deal is looking increasingly likely.

The BoE now expects to see a 33% chance of a recession due to Brexit uncertainty, and earlier in the day the new government outlined plans to spend up to £2.1bn on no-deal Brexit preparations which demonstrates the intent of the new government.

The growth forecast for the UK this year has been cut to 1.3% from the previous 1.6% expectations, and much of the slowing economy is being put down to both uncertainty as well as a lack of foreign investment.

Moving forward we could also see the Aussie Dollar come under pressure, as this week US President Donald Trump has outlined plans for additional tariffs on China and trade talks between the two appear to have stalled once again which has seen a global stock market sell-off. A slowing of the Chinese economy would likely result in a weaker AUD due to the interconnectedness of the two economies.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Aussie Dollar boosted by better than expected Chinese data, could GBP/AUD test its annual lows anytime soon?

The Pound to Australian Dollar exchange rate continues to slide as pressure mounts on Sterling now that the talk of a no-deal Brexit is ramping up. Boris Johnson, the UK’s new Prime Minister has now been PM for just over a week and already during this time we’ve seen sentiment towards Sterling drop as fears of a shock to the economy later in the year and taking their toll on the currency.

GBP/AUD has some distance to fall yet before we begin seeing annual lows, but Sterling has been in the headlines over the past week as GBP/USD has hit a 28-month low and GBP/EUR has hit a 22-month so Sterling is finding itself int he news for the wrong reasons.

The lowest the GBP/AUD exchange rate has been in the past 52-weeks is 1.7210 and at the time of writing it’s currently 1.7635, so as you can see there a bit further for GBP/AUD to fall before it catches up with some of the other major currency pairs. The Australian Dollar has been boosted this morning as Chinese Manufacturing PMI rose to 49.7 in July which is a slight improvement on the June figure and also better than expected. Investors won’t get carried away though as the figure remains below the 50 expansion/contraction benchmark. Strong data released out of China is likely to have a positive effect on the Aussie Dollar due to the link between the two economies, so those of our readers following the AUD’s value should look out for Chinese data.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

GBP/AUD hovers above 1.77 as markets await confirmation of new UK Prime Minister, with Boris Johnson the favourite

After a quiet month or so regarding Brexit updates and GBP volatility, the markets are now gearing up for the announcement of the new Tory leader and Prime Minister with frontrunner Boris Johnson expected to win by a clear majority.

It’s likely that the announcement will be made tomorrow and as we’ve seen over the past weekend there could be Conservative Party members that will wish to step down from their positions if Boris Johnson becomes Prime Minister.

Sterling has gradually lost value since the beginning of May against the majority of currency pairs as the likelihood of a no-deal Brexit has increased. Boris Johnson was one of the key figureheads of the pro Brexit movement and he’s suggested that he’s more open to the idea of a no-deal Brexit and leaving without a deal in place come October the 31st. This is why the Pound has come under pressure so those of our readers following the GBP to AUD exchange rate should be aware of this and the markets perception of Boris Johnson’s plans.

Data is light out of Australia this week, but I would expect all eyes to be on Reserve Bank of Australia Governor Philip Lowe’s speech in the early hours of Thursday morning. Any hints at future monetary policy from the RBA are likely to impact AUD exchange rates so it’s worth keeping an eye on this speech for that reason.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Could a slowdown in China result in a weaker Australian Dollar?

Our regular readers will be aware of the connecting between the Australian and Chinese economies, and in particular the importance of a strong Chinese economy and how this can benefit Australia along with the Australian currency.

In the early hours of this morning Chinese GDP figures were released by the National Bureau of Statistics and the data shows that in the second quarter of this year China’s economy grew at its slowest pace since 1992, which is growth at a rate of 6.2%. This figure was expected so we haven’t seen a sell-off in the value of the currencies tied to the Chinese economy which the Australian Dollar arguably is, but it could be a warning sign moving forward.

The trade war between Australia and the US appears to have taken its toll on the Chinese economy, and the efforts of the Chinese Central Bank don’t appear to have has d the intending effect which is why the economies growth is shrinking. Through 2018 the growth figure for the year was 6.6%, and I think that those of our clients and readers that are hoping for a stronger Aussie Dollar should continue to monitor the Chinese economies performance.

Although there will be no data releases out of the UK today, there will be a number of key releases this week such as Earnings Data tomorrow morning and a speech from Bank of England governor Mark Carney tomorrow amongst other releases throughout the week. Do feel free to register your interest with me if you wish to be updated in the event of a major market movement between the GBP/AUD pair.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.